Contact the SDEC, we have been in the Entrepreneur’s shoes. We may offer some tips on how to raise capital, review your business model and your presentation deck, listen to your elevator pitch and assist with potential introductions to Private Investors, Angel Investor Associations and Venture Capital Groups. We are based in San Diego, CA but our Investor network expands across the U.S., outside of the traditional Angel Capital Associations.
At the very early stages of a concept, Entrepreneurs usually tap into their own piggy bank, lines of credit and friends and family network, capitalized at $5,000 to $150,000 to get things going.
Outside Private and Angel Investors want to see if the Entrepreneurs are “In it to Win it”! Prove to them what and how much you can accomplish at your risk and your own sweat, and initial capital that you personally invested and received, before they can be sold to invest in your business concept. As an example, they want to know if you have the ability to break a pencil in half, without destroying it, and share it, and have your team use it, with the greatest impact.
If you say, “I have this great idea or concept…” that’s “all talk” in the Investor’s mind. Remember, “The REAL Entrepreneur does it!”
The quality execution of a great idea increases the Entrepreneur’s valuation and increases the chance to attain outside investors, and the next level of financing in the range of up to $1,000,000 or more.
Investor Groups are like “Country Clubs”, it’s productive and effective to be introduced versus knocking on their doors unannounced.
Today, you can find or identify a cottage industry and large garden variety of startup “Facilitators”/”Connectors” who say they help startups and organize startup meetings, and they bring in speakers/CEO’s, etc. for you to listen to, etc. At the end of these meetings/events, ask yourself, what did I take away to really execute? Will these guest speakers/panelist and facilitators/connectors be at my side to help me with my complex business model? You can attend event after event after event, in the end, as an Entrepreneur, you need to EXECUTE to WIN™ and quit attending passive events.
Check the backgrounds and experiences of these “Facilitators” or “Connectors” for the following: 1) Have they started a concept before, to full execution? 2) Have they raised capital in excess of $1M from outside investors? 3) Have they, themselves, not the company, business developed or generated sales in excess of $1M. 4) Have they recruited and led a Board of Director committee of seasoned and successful individuals, who were founders and/or executives at fortune 500 companies? Typically, BOD members have made a significant investment in the company, and have taken on a role with fiduciary responsibilities, therefore, D&O insurance is a major requirement. And 5) If they are charging you A LOT (in the hundred$) of money to attend these/their workshops? Don’t blame them, they are just being Facilitator-Entrepreneurs, capitalizing on your interests and pocketbook. Important! 6) If they charge you a upfront “fee” to engage with them, and/or to help you go “MICRO IPO” or “REVERSE MERGER into a SHELL IPO” or a “fee” to you help raise capital, you should—run away, run and keep running. The SDEC has experience with these types of organization(s) through a referral, trial and major ERROR…so run and let us know who they are, so we can place them on our “Watch Out” list.
Raising capital in excess of $1M and generating sales of over $1M has a different set of requirements and disciplines compared to attaining $10,000 to $100,000 in capital and sales.
There are entirely different sets and intensities of lights, buttons, whistles, sirens, levers and temperature gauges to anticipate, read, pull, push and prioritize, that only a person who has been in that control room and chair knows what to do. The analogy is this: If you plan to run your first 26.2 marathon, would you rather spend time training with someone who has ran multiple marathons or “hang out” with a person who has only thought about it, or has only ran 5K/10K’s? If you trained for and successfully completed a 26.2 marathon, you know exactly what this means. And add some expletives along the way, entrepreneurialism is not for the weak.
Also, there’s a big difference in the startup entrepreneurial ladder (raising capital food chain) between– 1) “Facilitators” (almost like event planners that collect and pass around business cards and try to sell you their services, their books and wares), 2) “Connectors” (They collect and pass around business cards, try to sell their services and wares, and know little about your business, and are not likely to invest), 3) “Collaborators” (May know and want to know about your business, may synergistically get involved and make introductions, and potentially invest, and develop strategic partnerships). And 4) “Investors” (Passive or Active investments, most likely to make introductions and develop strategic partnerships, and may require a Board of Director role). The raising capital food chain is based on having a “vested” interest with risk/exposure.
Here’s a list of the largest angel investing networks in the U.S., according to the Angel Capital Association, a trade association of investment groups. Other source: http://www.entrepreneur.com/article/220149
Band of Angels, Menlo Park, CA
Number of angels: 136
Who it helps: Group of former and current high-tech executives that has invested almost $200 million in early-stage technology companies.
Investors’ Circle, San Francisco, CA
Number of angels: 225
Who it helps: Uses private capital to promote businesses that address social and environmental issues. The group has invested almost $150 million in 225 companies, it says.
Pasadena Angels, Altadena, CA
Number of angels: 100
Who it helps: Provides up to $750,000 in early-stage and seed financing to startups in southern California.
Tech Coast Angels, Los Angeles, CA
Number of angels: 263
Who it helps: Provides connections, knowledge, mentoring and operational assistance to early-stage entrepreneurs in the tech, biotech, consumer products, Internet, information technology, life sciences, media, software and environmental markets.
Hyde Park Angel Network, Chicago, IL
Number of angels: 133
Who it helps: Members invest in seed and early stage businesses, primarily located in the Midwest. Industries include: information technology, business services, industrial technology, financial services, consumer or industrial products and healthcare services.
North Coast Angel Fund, Cleveland, OH
Number of angels: 180
Who it helps: Invests in Ohio-based technology startups.
Golden Seeds LLC, New York City, NY
Number of angels: 190
Who it helps: Members invest directly, or through a managed fund, in companies that are founded by or led by women. Sectors include consumer products, technology, software and life sciences.
New York Angels Inc, New York City, NY
Number of angels: 99
Who it helps: Made up of entrepreneurs, CEOs, venture capitalists and other business leaders, the group invests between $250,000 and $750,000 in early-stage technology companies generally located in the Northeast.